Rio Tinto Targets 10% of World Potash Market

The world potash market is characterized by a limited number of producers where four countries - Canada, Russia, Germany and Belarus - account for three-quarters of global output.

With a tightening supply of potash worldwide projected to remain tight for the next five years, and as fertiliser sales soar in step with biofuel production, the multinational mining and resources group Rio Tinto (RTP), wants to grab 10% of the world potash market notes Daily Telegraph - according to Preston Chiaro, chief executive of Rio’s energy and minerals unit.

Bill Doyle, CEO of Canadian firm Potash Corp., the world’s largest fertilizer producer,  told shareholders at the firm’s annual meeting that, “Around the world, potash customers are receiving shipments on an allocation basis, as supply is too tight to provide the full volumes they have requested.”

Global demand for potash stands at around 60m tonnes a year and is growing at about 3% a year. What’s more, fundamentally, the potash market is no longer a market of over-capacity and supply management. The potash industry has changed from being supply managed to demand driven.

All surplus capacity is currently getting absorbed to meet growing demand. The underlying fundamentals for this industry are incredibly strong which is the main driver behind Rio Tinto’s intended involvement in this market.

The push into a new commodity comes as Rio’s board fights a $140bn takeover by rival BHP Billiton (BHP).

Comments

[will]

Potash should be over 300 now. The criminals who are holding this down are about to get zapped like never before.

2008 Jul 27 06:29 PM

[podiddly]

What criminals? Potash Mosaic Agrium all seem to march to the same drummer, until the all give incredibly positive reports then...it seems
some body of stock holders sell, sell, sell, looking for a "floor" around $175...This, when the fundamentals, guidance, analysts etc. all say the stock (POT) should be north of $300.00 -- even $400.00 based on current PE and forward earnings. Is there a cartel that owns sufficient shares to drag this stock down...or are the Fund managers
so out-to-lunch that they keep lumping potash with oil and hard commodity futures?

2008 Jul 27 09:12 PM

[WACG]

A little matter of a US Steel Workers strike is a matter for concern ... or don't the other posters read anything but good news that supports their pollyanish view of POT?

2008 Jul 28 09:31 AM

[Deltaxray7]

WACG: What would a steel workers strike have to do
with fertilizer?

2008 Jul 28 09:51 AM

[windinmyface2]

WACG, Sounds like excuses to me, just like with the rest of the market. Use the slightest bad news to keep things down. About 2 month a go, there was nothing but gloom and doom to manipulate the market, or to get the Fed to drop interest rates, etc. The short term, cowboys hate the long term morons, as they call us. Just hold out, and don't let them scare you into selling.

2008 Jul 28 10:29 AM

[will]

Bill Doyle, CEO of Potash, is hanging shareholders out to dry while the manipulators screw with the stock price and he watches and does nothing. It's all DOYLE.

2008 Jul 28 11:11 AM

[mindmuse]

Good heavens, I should be so lucky if ALL the CEOs of my stocks left my "hanging out to dry" for a 125% profit.

2008 Jul 28 03:03 PM

[will]

This stock is going nowhere. Doyle has no plans to increase shareholder value.

2008 Jul 28 04:28 PM

[will]

Pathetic, MOS and CF beat nicely afterhours and both are going nowhere. Crooks, crooks, crooks. Too bad they weren't banks, they would have doubled overnight. They should have lost $5B but beat by $1B and we would be up 30%. A COMPLETE JOKE THIS MARKET. If thses AG stocks don't explode up tomorrow, put your money under your mattress cause game is over.

2008 Jul 28 05:34 PM

[will]

Potash bites and their Leaderhip Team talks a good game but does nothing to increase the stock price. Doyle smiles but sticks it to the shareholders with his lack of Leadership.

2008 Jul 28 09:25 PM

[Erin Young]

Hey Will, quit your crying you under-water bagholder. Potash is going to be just fine if you have the patience to hold it longer than a week.

2008 Jul 28 10:24 PM

[windinmyface2]

If you don't have patients, you shouldn't be playing the stock market. You will get burned every time. When its down I see it as a good time to buy more.

2008 Jul 29 12:40 AM

[windinmyface2]

Sorry , I mean patience...

2008 Jul 29 12:42 AM

[will]

Don't tell me to have patience. This stock is lower than it was a quarter ago. Doyle talks a good game but the stock sits lower than it was in April. With all those EPS increases etc.... you tell me why the stock isn't over 250 heading to 300. Doyle is accountable period.

2008 Jul 29 08:29 AM

[will]

US Steel blows away earnings just like p;otash did. The difference is they are up 10% this morning. Maybe Doyle ought figure out why????

2008 Jul 29 08:39 AM

[windinmyface2]

will, just sell then, and take a big loss. As soon as you sell, it will go up, and you will be kicking yourself. Why don't you just quit watching it for a while.

2008 Jul 29 12:09 PM

[Think-About-It]

Will, pull yourself together man. You are embarrasing yourself.

2008 Jul 29 12:19 PM

[will]

This stock won't see 230 until 2009 if its lucky

2008 Jul 29 02:07 PM

[T-table]

Does any one know how and where Rio Tinto plans to gain 10% market share of potash?

2008 Jul 30 02:29 PM

[windinmyface2]

T-table, Rio Tinto doesn't plan to gain 10% market shares of Potash, they plan to get 10% of the world Potash sales, as stated here.

Preston Chiaro, the company’s, (Rio) chief executive of energy and minerals, said two potash projects in Argentina and Canada will give Rio roughly 10% of the world’s market by 2012

2008 Jul 31 01:16 AM